The S&P 500 fell 0.2 percent to 1,459.24 at 4 p.m. in New York. The benchmark index yesterday reached its highest level since September after lawmakers passed a budget bill.

“Concern that they’re taking the punch bowl away could certainly cause some jitters in the market,” James Gaul, a portfolio manager at Boston Advisors LLC, which oversees about $2.3 billion in assets, said in a telephone interview. “The sell-off sits with what we’ve been thinking, which is that this has been a Fed-supported rally. The liquidity the Fed has been providing to generate financial asset inflation has been driving the market.”

Four years after cutting the main interest rate to near zero, policy makers are expanding their third round of so-called quantitative easing to boost economic growth and cut the jobless rate, now at 7.7 percent. Minutes from the Federal Open Market Committee meeting show policy makers are likely to end their $85 billion monthly bond purchases sometime in 2013.

The minutes show a divide among FOMC participants on how long the purchases should last. Participants who provided estimates were “approximately evenly divided” between those who said it would be appropriate to end the purchases around mid-2013 and those who said they should continue beyond that date.

Fiscal Cliff

The S&P 500 surged 2.5 percent yesterday, the most since December 2011, as lawmakers passed a bill averting spending cuts and tax increases scheduled to come into effect this year. After this week’s deal to avoid the so-called fiscal cliff, investors are turning their attention to impending confrontations between congressional Republicans and the White House over spending.

Lawmakers may need to approve an increase in the $16.4 trillion debt ceiling as early as mid-February, with Republicans planning to use the vote to force President Barack Obama to accept cuts in entitlement programs such as Medicare. Another showdown might emerge in early March, when Congress must confront the $110 billion in automatic spending cuts that were put off in the Jan. 1 tax deal.

The budget agreement passed by Congress on Jan. 1 won’t lower the country’s deficit enough to avoid a sovereign-rating downgrade, Moody’s Investors Service said yesterday. Moody’s, which has assigned its top Aaa ranking for the U.S., has a negative outlook on the world’s biggest economy, as does Fitch Ratings.